Craig R. McCoy and Joseph Tanfani

INQUIRER STAFF WRITERS

DALLAS TOWNSHIP, Pa. - The solicitor's voice shook as he tried to explain to a hostile crowd that natural gas pipelines are perfectly legal.

"If we have to have this," Tom Brennan said, "let's at least try to control it and have it on our own terms."

With that, to scattered applause and more groans, the township supervisors here decided to end a war over natural gas pipes that bitterly divided this town, a gateway to the rich Marcellus Shale region.

The compromise was a new, custom-tailored ordinance that banned high-pressure pipelines in residential neighborhoods, but permitted them in areas zoned for farms or factories.

Now, it appears the township's painstaking effort to craft a compromise between warring factions added up to nothing.

In what is shaping up as a key victory for the shale-gas industry, Gov. Corbett and the legislature appear close to stripping municipalities of the power to impose tough local restrictions on wells and pipelines. Under a pending measure, wells and pipelines would be permitted in every zoning district - even residential ones - statewide.

Two pipeline companies are seeking the clout of eminent domain. While the Pennsylvania Public Utility Commission has yet to rule, it signaled this year that it was leaning toward giving firms condemnation power to gain rights-of-way for their pipelines.

Dallas Township - an affluent suburb outside Wilkes-Barre in the Endless Mountains - is just one battlefield in a war that has flared in more and more Pennsylvania towns. The increasingly contentious conflict centers on proliferation of the new, large-diameter, high-pressure pipelines that carry Marcellus Shale gas to market.

In part, the war over pipelines is a proxy struggle over "fracking" itself.

As one Dallas Township opponent wrote in a Facebook message: "It is all one package. You cannot have a well without a pipeline, compressor and metering station, or vice versa. Stop just one, and stop all."

In its pursuit of its high-stakes agenda, the industry has been more than willing to play hardball, unleashing its lawyers and lobbyists.

Perhaps the most aggressive move came here in Dallas Township, in Luzerne County, when a Texas pipeline firm, Chief Gathering L.L.C., filed a lawsuit this fall threatening three of its opponents with potentially millions of dollars in damages. The suit said its opposition had subjected the firm to "public hatred, contempt, and ridicule in the community."

In another instance, Chesapeake Energy - the biggest driller in Pennsylvania - sent off a mass letter this summer to leaseholders in five counties, asking them to write Congress and complain about the Army Corps of Engineers, which must approve many pipelines that cross streams.

The "Dear Mineral Owner" letter warned that a corps review of gas pipeline projects was unduly holding up production - and delaying "royalty payments to you."

David J. Spigelmyer, Chesapeake's vice president and in-house lobbyist and the letter's author, said in an interview that the firm simply wanted its leaseholders to know who was to blame; the corps denies creating serious delays.

"At the time we had over 100 wells waiting on pipelines," said Spigelmyer, also the new chairman of the Marcellus Shale Coalition, the leading industry trade group.

"I believe we had an obligation to communicate with those leaseholders who had royalties withheld until we could get pipelines built to those locations."

In Westmoreland County, near Pittsburgh, Range Resources successfully filed suit to strike down the drilling and pipelines ordinance in Salem Township.

The court case, said Township Solicitor Gary Falatovich, "did a really good job of dismantling every modest control that the township was trying to impose. What can I tell you?"

Then there was the epic battle waged for more than a year over the Marc 1 - for Marcellus - a 39-mile, $257 million project that would open a new swath of Bradford, Lycoming, and Sullivan Counties to gas development.

The Marc 1 is not a gathering line running directly from wellheads, like most of the new pipeline construction in the state. It is a giant "hub" line of 30-inch-diameter steel pipe connecting two major interstate lines. Opponents fear many new clusters of wells will be drilled along the line and tie into it.

"If that Marc 1 pipeline goes through, it will be the equivalent of a superhighway for development," said Anne Harris Katz, a research biologist and activist.

Because it would link interstate lines, the Federal Energy Regulatory Commission (FERC) needed to grant approval before construction could start. And opponents of gas development thus got a rare chance to register loud disapproval in a public forum.

They flooded federal officials with thousands of letters opposing the line, and raising the specter of forest destruction and stream pollution.

In an unusual move, the U.S. Environmental Protection Agency aligned itself with skeptics, saying the line should not go forward without an in-depth study to consider the environmental impact of the drilling industry the new line would enable.

Last month, the industry prevailed after a bruising battle. FERC brushed aside EPA's concerns and granted the pipeline a green light.

Construction is to begin soon. Within days of approval, the line's builder filed scores of condemnation notices for the pipeline right-of-way.

Inside the stuffy, standing-room-only Dallas Township supervisors meeting in October, six children crouched in front of the table where the local officials sat, holding brightly colored placards. "Save the Earth," read one.

One woman held a sign showing an explosion with the words, "Sympathy and candles won't be enough."

Brennan, the solicitor, appealed for harmony.

"I'm trying to avoid this becoming 'us vs. them,' " he said.

It was already way too late for that.

Dallas Township found itself at the center of the pipeline debate because it is home to a stretch of a key interstate gas transmission line.

That's the Transcontinental, a 10,500-mile pipeline system that runs north from Texas. It is owned by Williams, of Tulsa, Okla., one of the nation's largest gas producers.

Williams and Chief, which is based in Dallas, Texas, have each stirred controversy by launching multimillion-dollar projects to lay new gathering pipelines to connect with the Transcontinental.

The new Williams line snakes 33 miles through three counties. It begins at drill sites in Susquehanna County, travels south through Wyoming County, and ends in Dallas Township.

The line, 24 inches wide, will operate at high pressure, up to 1,440 pounds per square inch. Every day, it will transport enough gas to heat roughly 6,000 homes for a year.

Chief's $150 million pipeline, also 24 inches in diameter and high pressure, is a few miles shorter. It will run from Wyoming County into Dallas Township.

Even so, after Chief filed plans to equip the new line with a compressor station not far from the township's massive 2,700-student school complex - a high school, middle school, and two elementary schools - residents turned out by the scores for a heated municipal meeting.

"The only thing missing from the hearing were pitchforks and torches," said Norm Tomchak, 69, a retired railroad engineer and a leader in the area's Gas Drilling Awareness Coalition, which has papered the township with "pipelines no" signs.

Though the Transcontinental line has operated without incident in Dallas Township since it was buried in 1946 - running by the township building, a nursing home, and Misericordia University - residents now are studying up on pipelines and asking skeptical questions about them.

"Five years ago, who knew about gas lines, who cared about gas pipelines? Who cared about gas drilling here in the Northeast? Nobody," Tomchak said.

That has changed.

Critics in Dallas Township took note when a section of the Transcontinental line suddenly ruptured and exploded in Appomattox, Va., in 2008, injuring five people and destroying two homes.

Eight days ago, the same pipeline failed in Alabama. No one was hurt, but the explosion shot flames skyward 100 feet for more than an hour and sent a 47-foot-long piece of buried pipe flying 200 feet.

But, of course, some residents do want the money. Though there are no wells in the township, about 50 property owners have signed leases to permit pipelines on their ground.

In Northeastern Pennsylvania, experts say the payments vary widely for pipeline right-of-way leases. At one point, Williams was offering Dallas residents $10,000 for a 1,000-feet stretch of right-of-way.

Pipeline leases aside, many residents see the natural gas boom in general as an economic plus for the entire Marcellus Shale region, providing gas royalties, jobs, taxes, and fresh money spent in restaurants, shops, hotels, and other businesses.

Patrick Dougherty, a Dallas Township resident who signed a right-of-way lease with Chief, said he regretted the discord in his community. That said, Dougherty said he thought neighbors' fears over safety were misplaced.

"Could you have an accident? Could it blow up? Yeah," he said. "There's always risk. But it just goes with having a modern society."

As for environmental damage, Dougherty said the pipeline's pathway would fade back into the landscape once the digging was over.

As tempers flared, Chief this year hit hard at three Dallas Township families that had been among its most outspoken foes.

The firm sued them for "tortious interference" two days after the three families, who live in the town's wealthiest enclave, Goodleigh Estates, sued a fourth neighbor who had signed a pipeline right-of-way lease with Chief.

The families had argued that their neighbor had violated a residential covenant that banned commercial activity.

In its counterstrike, Chief said the three families had leveled "defamatory and malicious" statements against it on Facebook and in the local newspaper. Among other claims, the suit alleged that defendant Jeffrey Dickson had made a "false" statement when he told a local reporter that the pipeline would mean the felling of trees and ruin the area's "natural beauty."

In one Facebook posting cited by Chief, Dickson wrote: "I think the Gas Companies wished that they bypassed Dallas and ran their lines somewhere else. It's not too late for them to change their plans. Keep up the pressure until they explode!"

And in another, Dickson said: "We need to post a list of people that signed pipeline leases and sold out to the gas companies so they could build their stations! Everyone in the area needs to know which of their neighbors are only thinking of themselves and the $$'s."

In an interview with The Inquirer in October, Scott Watkins, a dentist sued by Chief along with his father, also a dentist, called it a case of "David vs. Goliath."

"I think they're obviously trying to penalize us for exercising our constitutional right to express ourselves," he said.

Late last month, Chief reached a deal with the Dicksons and the two Watkins families. Lawsuits have been dropped - and the pipeline project is going forward.

A spokeswoman for Chief said the firm made no payment to the families but agreed to change the pipeline route to spare trees.

Once so vocal, the three families are now silent. Their Facebook postings have ended.

Deborah Goldberg, managing attorney for the Northeast office of Earthjustice, a nonprofit law firm critical of the pipeline industry, denounced Chief's lawsuit.

"It's bullying," she said. "It's classic gas industry behavior, where they just throw their weight around and terrorize people to get them to back off."

A Chief spokeswoman, Kristi Gittins, disputed that, saying the suit was not about "taking away their right of speech," but the firm's need to respond to a threat to block the pipeline.

"Quite simply, it was a business decision," she said of the suit. "We have hundreds of wells, not only ours but those of other companies, waiting on the pipeline."

Township residents Arlene and David Grudkowski and several neighbors refused to sign up when Williams offered to pay them to lay pipe across their properties. Williams ended up striking a deal with an absentee landowner who owned land adjoining theirs.

As a result, crews are now at work cutting down trees and digging a trench that wraps around the Grudkowskis' property, 100 feet or so from their house.

"We said no, and they went behind us," Arlene Grudkowski said. As she spoke to a reporter, a truck pulled up carrying massive sections of pipe.

"We're not happy about it," she said. "We're concerned that if there is any type of explosion, we're wiped, we're done.

"It's so close. It's just unbelievable for us. To stare at this all day, it makes you physically sick."

"It's not only an issue of safety," said Grudkowski's husband, David. "It's potentially changing the character of where we live. People are afraid that if they don't make a stand here, there's no end in sight."

At one point, the work in Dallas Township drew a violation notice from state environmental inspectors, for causing erosion and using an unauthorized access route.

Helen Humphreys, a spokeswoman for Williams, said its crews has fixed all the issues within 24 hours.

In interviews, officials with both Chief and Williams defended the industry's safety record.

Gittins, of Chief, and Mike Dickinson, of Williams, said pipelines were repeatedly and rigorously checked with visual inspections, X-rays of every weld, and scans with mechanical devices.

Both said their companies go beyond minimum federal safety standards when they install lines.

As far as the landscape, the industry says it strives to limit any impact during the digging and after.

At most, Dickinson said, lines create a "thin green corridor that would cut through the countryside that we can do our work on and maintain the pipe on, no different than maybe a corridor that a high-line wire runs through.

"We might say even less invasive than that because there's nothing visual to see except for grass on those corridors."

While neighbors quarreled over an ordinance to limit prospective new lines, township zoning officials struggled to bargain with Chief and Williams over projects already in the works - a difficult task, given that both firms suggested that zoning rules did not apply to them.

"Natural gas pipelines are not subject to zoning restrictions or approval proceedings," Chief wrote the township in June.

In the end, a deal was struck this summer. The firms got the right to lay their pipelines in the township, but dropped plans for compressors, odorizers, and communications towers.

Aside from metering stations, they said they would keep future facilities at least 13/4 miles from the township school campus. They also did not pursue challenges to the township's zoning.

As the township's zoning board took up Chief's case for a metering station last week, it grappled with a headache afflicting many shale communities - the increasingly common linkages between officials and the shale industry.

Zoning board member Conrad Higgins has signed a pipeline lease with Chief and has recused himself from votes on pipelines. But, under state ethics law, he can vote to break ties.

Another board member, chairman Robert Bayer, is an executive with Linde Corp., a firm whose website says it "specializes in Marcellus Shale, municipal and utility pipeline construction." Its jobs include the Williams pipeline project.

Bayer said he would recuse himself from the zoning hearings for Williams, but would take part in those for Chief. "I think I can remain impartial," he said.

Last week, Bayer and another board member voted to approve a Chief zoning request for a metering station on its pipeline. Higgins abstained.

The effort to regulate pipelines in Dallas Township is part of a grass-roots movement in Pennsylvania.

Belatedly, many municipal leaders have come to realize that their communities have few land-use tools to deal with the drilling and pipeline-construction boom.

John Gaadt, a planning consultant in Chester County who won federal funding to draft model local pipe ordinances, said many communities' regulations do not even contain the word pipeline. In many rural communities in the heart of shale country, he and others note, there are no zoning codes at all.

While Dallas Township's new ordinance may be nipped in the bud by a statewide law, Gaadt urges communities to take other steps.

One suggestion is to limit construction near pipelines, especially of buildings like office plazas or retirement homes.

Beyond definite setback rules, Gaadt and other experts say towns should create even wider "consultation zones" - areas where developers and pipeline owners would have to at least talk with one another before building could take place.

In Dallas Township, the ordinance would have banned pipelines in residential areas.

While the Marcellus Shale industry has signaled its willingness to pay some sort of drilling tax or impact fee, it also has made it plain that it would like something in return: a strict limit on local government's power to regulate the industry.

Legislation that would turn this trade-off into law is in the works in Harrisburg. The Senate passed its bill last month, 29-20, and the House approved its proposal, 107-76. Passage of a reconciled final law is expected soon.

In any event, both measures treat local zoning the same way. They state that all local ordinances must "authorize oil and gas operations," including pipelines, in all zoning districts."

Significantly, the proposed law would require local governments to treat gas operations as "permitted" uses, not as "conditional" ones. The latter designation would require firms to go through more extensive reviews.

"Not only must you permit it, but you cannot put conditions on it," said Myron Arnowitt, the state director for Clean Water Action, an environmental group helping drum up opposition to the state preemption.

The Dallas Township ordinance would treat pipelines as conditional uses. The industry opposes this approach, saying it amounts to "death by a thousand paper cuts" by requiring far too many hearings, a Range Resources spokesman has said.

Before the state Senate and House took up the measure last month, Gov. Corbett released a statement calling for "a reasonable, consistent and uniform set of rules across the commonwealth."

While all Pennsylvanians want "clear air, clean water, and safety in this growing industry," Corbett wrote, a statewide set of standards was needed to advance "one other goal" - jobs.

The governor also noted that the statewide measure would impose some common controls, such as a noise limit for compressor stations. In residential areas, all wells must be at least 500 feet from the nearest building.

There would be no such setback restrictions for pipelines, though.

The bill has teeth. If the courts or the attorney general finds a community's local law in conflict with the state measure, the community will lose all of its impact-fee money.

Arnowitt said the law would undercut work in dozens of communities.

"This is not a compromise piece of legislation; this is allowing the gas industry to write our local laws," he said.

"I don't think there is a single township that passed a new zoning ordinance in the past three years that meets the new standards. The local laws that have been passed are stricter."

But Spigelmyer, the Chesapeake executive and Marcellus Shale Coalition chairman, said statewide uniformity was sorely needed.

In recent months, he said, more than 80 municipalities across the state have moved to adopt unduly restrictive and unfair rules.

"The way it was working," he said, "they were taking your rights away from you."

Spigelmyer said the pending measure reaffirmed past statutes giving the state government a virtual monopoly in gas and oil regulation.

The measure has stirred considerable conflict among municipal leaders - who want the revenue from the impact fees, but resent the loss of their local powers.

David M. Sanko, executive director of the State Association of Township Supervisors, said his organization was looking for a "sensible, reasonable common ground" that would strike a balance between state and local authority.

Larry Grimm, a supervisor in Mount Pleasant Township in Westmoreland County, was more emphatic. He said Corbett and the legislature were stripping local officials of the ability to tailor laws to fit their unique areas.

"We're different than they are up there in Potter County, enormously different," Grimm said. "They're taking that away from us. It's just that simple."

In Dallas, with opposition quieted, the Williams gathering line is now nearly done. Work on the Chief line is to start next month and finish by the summer.

As for the zoning law that galvanized the township, it is likely to be wiped out when a new state law passes next year.

Even Tomchak, once among the most outspoken pipeline fighters in Dallas, now says he's reluctant to speak out, for fear of being sued like his neighbors.

"I'll work in the background as much as I can," Tomchak said. "I don't want a lawsuit. I'm not rich. I can't afford to defend myself."